Answered step by step
Verified Expert Solution
Question
1 Approved Answer
thw givin for this question reffered to picture 1 You have constructed the following portfolio. (Note that the percentages between parentheses represent the weights.) Assume
thw givin for this question reffered to picture 1
You have constructed the following portfolio. (Note that the percentages between parentheses represent the weights.) Assume that the expected return and risk on the overall portfolio are respectively equal to 17% and 26%. The risk-free rate is 7%. AXA (40%) Risky (80%) DOT (25%) Overall Portfolio CARD (? %) Risk-Free (20%) T-Bills (100%) 1. Determine the proportion that you have invested in the financial asset "CARD" in the overall portfolio (risky and risk-free assets). O A) 70% OB) 28% OC) 80% OD) 35% O E) None of the above 2. Assume that your degree of risk aversion is A=6. What proportion, y. of the total investment should be invested in the risky assets? O A) 25% B) 24.6% C 35% D) 65 E) None of the above 3. What is your risk on the optimized portfolio? OA) 0% 0 B) 6.4% C) 26% O D) 17% O E) None of the above EStep by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started